Update: Viacom Files $1B Copyright Suit Vs. Google, YouTube

Viacom said Tuesday that it has filed a $1 billion copyright infringement action against both YouTube and Google, alleging that the sites have allowed Viacom's copyrighted content to be illegally displayed.

Viacom said Tuesday that it has filed a $1 billion copyright infringement action against both YouTube and Google, alleging that the sites have allowed Viacom's copyrighted content to be illegally displayed.

The suit, filed in the the U.S. District Court in the Southern District of New York, also seeks an injunction prohibiting both companies from further infringement.

According to Viacom, more than 160,000 clips of its content are being housed on YouTube, with those clips being viewed more than 1.5 billion times. Representatives for Viacom said the two sides had negotiated for many months without an accord.

That a content provider would sue Google was not a surprise; speculation that Google might be sued began brewing soon after Google acquired YouTube for $1.65 billion in Oct. 2006. Executives at rival Guba.com had claimed in emails that YouTube had built its business on piracy.

"YouTube is a significant, for-profit organization that has built a lucrative business out of exploiting the devotion of fans to others' creative works in order to enrich itself and its corporate parent Google," Viacom said in a statement. "Their business model, which is based on building traffic and selling advertising off of unlicensed content, is clearly illegal and is in obvious conflict with copyright laws. In fact, YouTube's strategy has been to avoid taking proactive steps to curtail the infringement on its site, thus generating significant traffic and revenues for itself while shifting the entire burden  and high cost  of monitoring YouTube onto the victims of its infringement."

Youtube, via a Google spokesman, said that it believed it had respected the rights of copyright holders.

"We are confident that YouTube has respected the legal rights of
copyright holders and believe the courts will agree," the company said. "YouTube is great for users and offers real opportunities to rights holders: the opportunity to interact with users; to promote their content to a young and growing audience; and to tap into the online advertising market. We will certainly not let this suit become a distraction to the continuing growth and strong performance of YouTube and its ability to attract more users, more traffic and build a stronger community."

Viacom's complaint appears to hinge on the fact that Google and YouTube are allegedly selectively enforcing limits on content. In its complaint, Viacom notes that YouTube prohibits and actively filters out pornographic content, while aggressively pursuing companies that provide applications to download the videos YouTube posts to its site. The complaint also alleges that YouTube's copyright-defense software doesn't prevent users from re-filing new copyrighted content when it is taken down and doesn't block repeated violators.

A "friends" function also hides copyrighted and other content from a general search unless a "friend" of the original poster searches it out, the complaint says. This feature is "deliberately interfering with copyright owners' ability to find infringing videos even after they are added to YouTube's library," the complaint said.

"In truth, YouTube opposes such copying becaue YouTube receives advertising revenue and new users only if viewers are drawn to YouTube's site to view videos, not when users make copies that they can share with others independently of YouTube's site," the complaint said. "Thus, when it is in YouTube's financial interest to do so, it proactively polices content it regards as unauthorized, even on other websites."

Other distributors have licensed content, Viacom said. In February, Viacom licensed its content to Joost, a video startup pioneered by Niklas Zennstrom, who founded Skype.

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"There is no question that YouTube and Google are continuing to take the fruit of our efforts without permission and destroying enormous value in the process," Viacom added. "This is value that rightfully belongs to the writers, directors and talent who create it and companies like Viacom that have invested to make possible this innovation and creativity.

"After a great deal of unproductive negotiation, and remedial efforts by ourselves and other copyright holders, YouTube continues in its unlawful business model," the statement concluded. "Therefore, we must turn to the courts to prevent Google and YouTube from continuing to steal value from artists and to obtain compensation for the significant damage they have caused."

Editor's Note: This story was updated at 1:07 PM to add details from Viacom's complaint as well as a response from Google.